Global Cement Newsletter

Issue: GCW642 / 17 January 2024

Headlines


This year will mark the 10th anniversary of the Yazidi genocide in Sinjar, Iraq. Beginning on the night of 2 - 3 August 2014, ISIS displaced the entire Yazidi population from its homeland, amid a campaign of abductions and killings that claimed 12,000 victims.1 A striking detail of this and other crimes of the self-proclaimed caliphate is the proximity of a Western corporate actor: cement producer Lafarge, whose subsidiary Lafarge Cement Syria operated the Jalabiyeh cement plant in neighbouring northern Syria. On-going investigations have since helped uncover what may amount to complicity on the part of Lafarge and Lafarge Cement Syria in the form of payments dating back to August 2013.2

In a week that began with the abandoned Jalabiyeh cement plant ablaze following a drone strike,3 Lafarge learned that it will face trial in France over its alleged complicity in crimes against humanity committed by ISIS.4 On 16 January 2024, the French Court of Cassation upheld Lafarge and Lafarge Cement Syrias' indictments on the charge. Also reportedly indicted are (all former) Lafarge CEOs Bruno Lafont and Eric Olsen, vice president Christian Herrault and security director Jean-Claude Veillard and Lafarge Cement Syria CEOs Bruno Pescheux and Frédéric Jolibois, along with an intermediary and a Jordan-based risk management consultant.5, 6 The collaboration in question includes monthly payments to ISIS and other armed groups worth US$15.5m, a lower French court found in May 2022. It may be more than another 20 months before the thorny mass of issues to be considered by the court resolves itself in convictions, or cleared names.

Another front in Lafarge and Lafarge Cement Syria's legal battle over what happened in Syria is the US civil court system. Activist and survivor Nadia Murad and 426 other Yazidis have filed an Anti-Terrorism Act claim for damages, based on the companies' previous guilty plea to the US Department of Justice to conspiracy to the tune of US$5.92m in October 2022. Murad and fellow claimants allege ‘far higher’ total payments, pointing to correspondence between Lafarge Cement Syria and its intermediary that references ‘[sic] ten millions that we pay directly to them, i.e. to ISIS.’ The DoJ estimates the total value of the conspiracy for all parties at US$80.5m.

On 6 August 2014 (the fourth day of the Yazidi genocide), Lafarge and Lafarge Cement Syria signalled their agreement to enter into a new long-term agreement to share their revenues with ISIS. On 15 August 2014, the UN Security Council issued Resolution 2170 condemning 'any engagement in direct or indirect trade' with the organisation.7 Lafarge and Lafarge Cement Syria allegedly concluded the revenue-sharing agreement, under new terms more beneficial to ISIS, on that same day.

Lafarge Cement Syria finally evacuated the Jalabiyeh cement plant in September 2014, whereupon ISIS added it to its own five-plant international cement network, with sales worth US$583m/yr. The US-led Coalition bombed the site in October 2019 and it was subsequently occupied by Kurdistan Workers’ Party (PKK) forces. The strike on 14 January 2024 was part of a drone campaign by Turkish forces against Kurdish positions that the invaders say destroyed 23 targets.

It is conceivable that Turkish armed forces also had personal reasons for destroying this monument to Lafarge’s former presence in the region: on Lafarge’s stipulation, ISIS implemented a duty on Turkish cement entering its area of control, ostensibly charged at US$150/truck. As anyone familiar with the Turkish cement sector knows, one of the major investors in the industry happens to be the country’s military pension fund.

For the 400,000 Yazidis who have survived, the tragedy that began in August 2014 will not end soon. More than half remain in refugee camps. Among the missing are 2000 girls and women who the International Centre for Counter-Terrorism suspect ISIS may have 'further entrenched in human trafficking,' constituing a continuation of the genocide that has outlasted both the self-proclaimed caliphate and the French multinational that may have helped to bankroll it.8 Courts in different countries are helping bring to light a reign of terror that spanned international borders. In the US, some of its victims may find redress, while in France, justice may be closing in on anyone who might prove to have made common cause with the perpetrators.

References

1. RASHID, 'DESTROYING THE SOUL OF THE YAZIDIS,' Augut 2019, https://www.rashid-international.org/downloads/RASHID_Yazidi_Heritage_Destruction_Report_2019.pdf

2. Jenner & Block, 'IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK,' 14 December 2013, www.jenner.com/a/web/fy85Wd97fANx7fwBecn31r/23-9186-as-filed-complaint2.pdf

3. ANHA, 'Turkish occupation army targets former Lafarge site,' 14 January 2024, https://hawarnews.com/en/turkish-occupation-army-targets-former-lafarge-site?__cf_chl_tk=mSB3Ph6iU.3FEJ.Z3ywRvcu2n.tOahhpLnd.Fmqk0SU-1705415232-0-gaNycGzNDHs

4. Reuters, 'Lafarge can be charged with 'complicity in crimes against humanity' over Syria plant, French court says,' 16 January 2024, https://ca.news.yahoo.com/lafarge-charged-complicity-crimes-against-132904436.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANqF5SKpSZ7KB5rT5rjo_vFZ5LGdZ9bVkC5SeNw3iZGneLy5Tir2dsb1O3GQjITBRSF_xEs2GDBcSU94nKOocm-npnTznmbfhKB_FgOsBCg-9lO7ilPP2phHAcGahghG9yjmFoWVd24uU7xEwZ2RZqmmMaE2bSIIcTGRuh4LAlXD

5. Madeline Young, Lafarge's Case Cemented, 2021, https://scholarlycommons.law.emory.edu/cgi/viewcontent.cgi?article=1032&context=eilr-recent-developments

6. Le Télégramme, 'Complicité de crimes contre l’humanité : les poursuites contre Lafarge validées par la Cour de cassation?' 16 January 2023, www.letelegramme.fr/france/complicite-de-crimes-contre-lhumanite-les-poursuites-contre-lafarge-validees-par-la-cour-de-cassation-6505590.php

7. UN Security Council, 'Security Council Adopts Resolution 2170 (2014) Condemning Gross, Widespread Abuse of Human Rights by Extremist Groups in Iraq, Syria,' 15 August 2014, https://press.un.org/en/2014/sc11520.doc.htm#:~:text=Through%20the%20unanimous%20adoption%20of,as%20ISIS)%20and%20Al%2DNusra

8. Al-Dayel et al, ‘ISIS and Their Use of Slavery,’ 27 January 2020, https://www.icct.nl/publication/isis-and-their-use-slavery

 


UK: C-Capture has appointed Warren East as its new chair. East was previously CEO of automobiles producer Rolls-Royce and computing company ARM Holdings. C-Capture says that East will bring almost 40 years’ experience in commercialising innovative technologies to its own efforts to develop a scalable, modular model for carbon capture. East is a chartered engineer and holds an engineering degree from Oxford University and a CBE for services to engineering and technology.

C-Capture CEO Tom White said “I am absolutely delighted to announce that Warren will be joining us. His wealth of experience in commercialising novel technologies along with his commitment to the energy transition is a true asset to the company at a critical period in our growth. His expertise in successfully scaling and transforming businesses will be invaluable as we move forward with the commercialisation of our unique technology and expand our investor base.”

Warren East said “I am excited to be joining the team at this pivotal point and to work with the management to scale the business. C-Capture’s carbon capture technology has all the elements needed to break through the barriers currently preventing widespread adoption of this critical technology for the world to achieve Net Zero.”


India: Dalmia Bharat Group has announced its promotion of Gaurav Rajput to the role of deputy general manager finance and accounts. Rajput joined Dalmia Bharat Group from IT company IBM in 2023. He previously worked for LafargeHolcim India and ACC.


US: Monarch Cement announced vice president of cement manufacturing Kenny Miller’s retirement in a posting published on OTC Markets on 15 January 2024. Miller had held his position since April 2014. He holds a Bachelor of Science degree from Friends University, Kansas.


India: Ambuja Cements has signed a memorandum of understanding (MoU) with the government of Telangana for the construction of a new cement facility in the state. The News Minute has reported that the producer plans to invest US$168m in the project. The MoU is part of an agreement between parent company Adani Group and the state of Telangana covering investments worth US$1.49bn. Other projects include an MoU with Adani Group’s renewables subsidiary Adani Green Energy for the construction of a total of 1350MW of energy storage capacity.


Bangladesh: Crown Cement (formerly MI Cement Factory) officially commenced production from its Munshiganj grinding plant’s new Unit 6 on 14 January 2024. The Daily Star newspaper has reported that the new unit increases the Munshiganj plant’s capacity by 72% to 5.7Mt/yr. MI Cement Factory previously signed a US$22.8m syndicated loan facility for the expansion with Eastern Bank Limited on 28 May 2023. The producer said that delays with suppliers and currency crises postponed its delivery of the project. It first postponed the expansion – at that time valued at US$54.6m – due to domestic overcapacity amid the Covid-19 outbreak in October 2020.


Saudi Arabia: Najran Cement has informed investors via a posting on the Saudi Exchange that it expects its cost of sales to rise by 13%. This is due to an increase in the price of fuels by its supplier Saudi Aramco. The cement producer noted that the waste heat recovery (WHR) system installed at its Najran cement plant has partly reduced the anticipated impacts on costs.

Najran Cement said “The company will work during the coming period to explore ways to reduce the financial impact of this adjustment on the company’s profits and will continue to implement its plans to reduce costs and improve production and operating efficiency. It will also work with government agencies to explore ways to diversify energy sources.”


France/Middle East: The Court of Cassation, France’s highest court, has upheld Lafarge’s indictment on charges of complicity in crimes against humanity, Reuters has reported. A lower court previously concluded that the company had paid US$15.5m to armed groups in the Middle East, including ISIS, via its subsidiary Lafarge Cement Syria. In its latest ruling, the Court of Cassation quashed another charge of endangering the lives of employees, on grounds that Lafarge’s foreign labour relations are not subject to French law. The group had reportedly not appealed a further charge of financing a terrorist enterprise.

Read the latest on Lafarge’s on-going trials in this week’s Global Cement analysis.


Switzerland: McKinsey & Company and the World Economic Forum have recognised Holcim’s ECOCycle recycling technology for construction-demolition material (CDM) as a "Circularity Lighthouse in the Built Environment." ECOCycle technology can process 100% of CDM input into new building materials with 75% lower CO2 emissions than traditional alternatives.

Chief sustainability officer Nollaig Forrest said “Circularity is a game changer to decarbonise buildings at scale. At Holcim we are operating over 100 ECOCycle recycling centres globally to drive circular construction. With our advanced recycling of CDM, we can already reduce the CO2 footprint of cement by up to 40%. This is just the beginning; as we innovate and partner across the value chain to evolve building norms, we aim to accelerate the shift to circular construction in all metropolitan areas where we operate.”


Oman: Oman Cement Company recorded sales of US$189m in 2023, up by 4% year-on-year from US$181m in 2022, Reuters has reported. The company’s net profit also grew during the year, by 16% to US$15.1m from US$13m.


Saudi Arabia: Arabian Cement Company has estimated that its production costs will rise by 14% after Saudi Aramco raised its fuel prices. In an addendum to a previous announcement published on the Saudi Exchange on 4 January 2024, the producer said that it will explore cost reduction strategies throughout the coming financial period.


Brazil: Votorantim Cimentos and Atlas Renewable Energy have launched a joint venture to build a 470MW solar power plant in Paracatu, Minas Gerais. Additionally, the parties signed a power purchase agreement (PPA) for the supply of 100GWh/yr of solar energy for Votorantim Cimentos' cement plants between 2026 and 2041. The moves align with the producer’s aim to achieve 75% renewable energy reliance in its operations.


Argentina: Cement shipments across Argentina totalled 12.6Mt nationally in 2023, down by 3.2% year-on-year from 13Mt in 2022. Central de Noticias News has reported that the Portland Cement Manufacturers Association (AFCP) attributed this to the continuing ‘paralysis’ of private and public construction projects. The Construction Index dropped by 7.9% year-on-year in 2023.


India: Shah Rukh Khan (SRK) has become the latest Bollywood superstar to help advertise cement in India. Khan appears in UltraTech Cement’s Build and It Will Grow (Banega Toh Badhega) advertising campaign, launched on 15 January 2023. The opening advert shows the Aśoka star among workers, school pupils and the Indian Army carrying out different activities facilitated by infrastructure.

UltraTech Cement said “SRK is a shining example of the rise and aspirations of India. His personal journey is one of resetting boundaries and aiming high. We thus believe that he is aptly suited to represent UltraTech’s credo.”


US: Summit Materials and Cementos Argos have successfully combined their operations in the US under a single entity. Summit Materials acquired Argos North America Corp. for US$1.2bn, and conversely issued 31% of its shares to Cementos Argos. Summit Materials expects to derive US$100m in additional earnings before interest, taxation, depreciation and amortisation (EBITDA) through the deal. Three representatives of Colombia-based Grupo Argos will sit on the board of up to 11 directors of the new combined entity.

Cementos Argos CEO Juan Esteban Calle said "The combination with Summit Materials, which had the resounding support of its shareholders, allows us to begin a new chapter in the successful history of our presence in the US, and is built on shared values, strategic vision and complementary capabilities.” He added “This new milestone consolidates our objective of continuing to expand our presence in the most attractive construction materials industry in the world for the benefit of our shareholders and all interest groups."


Kazakhstan: Steppe Cement reported US$82.5m in sales in 2023, down by 7.2% year-on-year from US$89m in 2022. The company attributed this to a decline in sales, to 1.6Mt in 2023. It said that it commanded a 14% local market share for the year.


Iran: 70% of cement plants by capacity were reportedly using the low-quality heavy fuel oil mazut as cement fuel on 13 January 2024. Iranian Labour News Agency has reported that plants transitioned to the fuel from natural gas amid an on-going gas shortage. This has led to a rise in costs and increased pollution from cement plants.

Iran’s Cement Industry Employers’ Association said that the industry’s supply of natural gas has dropped to 7Mm3/yr, from 27M3/yr normally.


UK: CRH subsidiary Tarmac has successfully deployed France-based software developer Everysens’ Transport Visibility & Management System (TVMS) in its total operations processing system (TOPS) for rail transport. The TVMS digitally tracks trains, enabling the customer to measure performance, analyse patterns and ensure smooth anticipation and collaboration between stakeholders. Tarmac expects the upgrade to streamline its delivery monitoring and also allow for proactive decision-making.

Tarmac head of rail Chris Swan said "Everysens' integration with TOPS has significantly supported Tarmac to digitise its rail freight operations. Tracking our freight trains has become a lot easier and more precise through digital solutions. With real-time ETA data, we can optimise routes, manage resources, and provide an even higher level of service to our customers. This integration underscores our commitment to staying ahead in technology and embracing digitisation for more efficient and streamlined operations."


Kazakhstan: National cement consumption volumes totalled 11.5Mt in 2023. The figure represents a year-on-year decline of 0.9% from 11.6Mt in 2022.


Iraq: Al-Riyadh Investment Companies Group subsidiary Al-Douh Iraqi Company for Cement Industries plans to expand its Al Douh cement plant’s capacity by 58% to 3Mt/yr. The expansion is part of an upgrade involving the installation of a new kiln, a gas-fired captive power plant and a new waste heat recovery (WHR) plant. The WHR plant will provide 30% of the plant’s energy. The US-based International Finance Corporation (IFC) has loaned Al-Douh Iraqi Company for Cement Industries US$130m on a long-term basis for the project.

The IFC says that it expects the Al Douh cement plant expansion to help boost economic diversification, spur sustainable growth in Iraq and generate 2700 new jobs in Muthanna Governorate.


US: Summit Materials has announced that its shareholders voted in favour of its proposed merger with Cementos Argos subsidiary Argos USA. Dow Jones Institutional News has reported that the parties expect the deal to conclude on 12 January 2024.


Philippines: Petra Cement has concluded a manufacturing and sales agreement with industrial conglomerate Phinma Corp. Reuters has reported that the agreement gives Phinma Corp. operations control over Petra Cement’s Zamboanga grinding plant on the island of Mindañao.

Phinma Corp. is already active in Philippine cement production through its subsidiary Philcement, which operates the 2Mt/yr integrated Bataan cement plant in Central Luzon.


Latvia: Schwenk Latvija plans to build a 750,000t/yr carbon capture system at its 2Mt/yr Brocēni cement plant. The producer has hired Norway-based Capsol Technologies to conduct a CapsolEoP carbon capture feasibility study at the plant. Schwenk Latvija is a member of the CCS Baltic Consortium, which achieved provisional inclusion on the European Commission’s list of Projects of Common Interest in November 2023.

Schwenk Northern Europe CEO Reinhold Schneider said “Checking the best carbon capture methods and how they can be integrated with our production process is a crucial task for us on the way to carbon neutrality, and likely the major investment direction for the coming decade. To that end, we are excited to investigate the energy consumption and the scale of equipment required for carbon capture at the Brocēni plant, if potentially partnering with Capsol for this challenge.”

Capsol Technologies CEO Jan Kielland said “We are excited to work with Schwenk, one of the most innovative building materials producers in Europe, which has constantly improved its processes to reduce emissions since operations started at the Brocēni plant’s new kiln line in 2010” He added “With this feasibility study, we are taking another step towards building a position as the preferred carbon capture technology provider for cement.”

Capsol’s project pipeline includes 10 large-scale cement projects in the sales engineering and engineering studies phase. The total CO2 capture capacity of these projects is 11Mt/yr.


Uzbekistan: The government has reduced the tax on limestone for use as a raw material in cement production. Uzbekistan Newsline has reported that the tax rate has dropped by 73% to US$0.48/t.


India: UltraTech Cement has concluded a deal to acquire a 26% stake in renewable energy provider Amplus Ages. ET Infra News has reported the value of the deal as US$5.91m. The parties expect the deal to complete within 180 days of its execution.

The cement producer, a subsidiary of Aditya Birla, said "The acquisition is for the purposes of meeting the company's green energy needs, optimising energy costs and complying with regulatory requirements for captive power consumption."


Brazil: Brazil consumed 62Mt in 2023, down by 1.7% year-on-year, according to data from the National Cement Industry Association (SNIC). This marks the second successive year of decline, after demand dropped by 2.8% to 63.1Mt in 2022. As a result, cement’s value on the National Construction Cost Index dropped by 6%, after having risen by 13% in 2022. The domestic cement industry recorded a capacity utilisation rate of 66% in 2023.

SNIC president Paulo Camillo Penna noted high household debt, high interest rates and poor income growth as impacting the industry’s sales. He said “The My House, My Life housing programme was not fully operational until the middle of the year. Up to September 2023, the construction industry experienced a 16% decline in the number of real-estate launches.” He continued “By 2026, we will experience a period of turnaround for the cement industry.”


Malaysia: Hume Cement Industries has accepted an offer for a parcel of land it owns in Prai Industrial Estate, Pulau Pinang. Reuters has reported the value of the deal as US$8.57m, on which Hume Cement Industries expects to make a net gain of US$6.89m.


Germany: Rohrdorfer Zement has fired up a pilot clay tempering unit at its Rohrdorf cement plant in Bavaria. The project has received Euro8.65m in funding from the German Federal Ministry for Economic Affairs and Climate Action and the EU. It is one of a number of industrial projects under the EU’s Euro800bn NextGenerationEU post-Covid-19 economic recovery instrument. Sources of heat for the pilot unit at the Rohrdorf cement plant include waste heat from the plant’s clinker line. If the pilot succeeds, the introduction of tempered clay into cement production at the site will follow. This will entail the construction of an on-site full-scale clay tempering plant. Rohrdorfer Zement says that this would reduce the plant’s CO2 emissions by 16 – 18%, or by 30% if it achieves carbon neutral clay tempering through the use of green hydrogen.

Rohrdorfer’s dedicated Net Zero Emissions Labs team is working to turn the Rohrdorf cement plant carbon neutral by 2038. Other initiatives include the installation of carbon capture systems at the Rohrdorf plant and another in Austria, and participation in the H2-Reallabor Burghausen hydrogen partnership.

Regarding the latest pilot, Rohrdorf Net Zero Emissions Labs project leader Helmut Leibinger said “As a cement component, tempered clays make a significant contribution to CO2 mitigation. With the pilot project of process-integrated tempered clay, we are taking not just a step in our decarbonisation roadmap, but a leap.”


Oman: Middle East Calcined Clay and Netherlands-based Kaolin Group International plan to build a limestone calcined clay cement plant in Oman. The partners have hired Spain-based turnkey plant engineer IPIAC to supply equipment including its Plug and Clay clay calcination unit. The new plant will produce limestone calcined clay cement with 40% lower CO2 emissions than ordinary Portland cement (OPC), according to the supplier.

IPIAC previously introduced the technology in Cuba and Ivory Coast, and is currently retrofitting it to a clinker line in Angola.


India: JSW Group has initiated the process for an initial public offering (IPO) for JSW Cement. The Financial Express newspaper has reported that the group expects the IPO to raise US$723m.


France: Heidelberg Materials has completed its divestment of its French cement transport business, Tratel, to multiple local players. Tratel controls 450 trucks and around 770 trailers across France. Groupe Garnier has taken it over in the north western and Île-de-France, e-b-trans in south eastern and south western France, Groupe DESERT in western France and T2GL in eastern France, while Heidelberg Materials France continues to manage order intake, chartering and dispatch activities. Heidelberg Materials says that the move advances its portfolio optimisation strategy, which involves increasing its focus on core businesses.


India: JSW Cement has appointed Finland-based Coolbrook to install its RotoDynamic Heater electric kiln technology at the Vijayagar steel works and slag and cement grinding plant in Karnataka. Press Trust of India News has reported that the partners expect the technology to reduce the CO2 emissions of the plant’s slag cement.

Read about the applications for the RotoDynamic Heater in cement production in this Global Cement interview with Coolbrook CEO Joonas Rauramo.